New agreements concluded in key private sector accord areas

In April 2010, the social partners within the so-called trend-setting industries in Norway, which include important parts of the manufacturing sector, reached agreement on a general wage increase of NOK 1 (€0.13) an hour, as well as additional low pay increases, and an extraordinary equal pay increase to be distributed at company level. The wage settlement is expected to generate wage growth of about 3% from 2010 to 2011.

In the spring of 2010, the biennial collective agreements in Norwegian working life were due to be renegotiated. This year, the private sector wage settlement was to be carried out as an industry-level settlement – in other words, all of the private sector collective agreements are to be negotiated separately. At the outset, it was expected to be a moderate settlement. The main demand put forward by the Norwegian Confederation of Trade Unions (Landsorganisasjonen i Norge, LO) was a general improvement in the purchasing powers of all groups; however, LO also took into account the challenges generated by the recent economic crisis and the problems witnessed in the international economy. The employer side demanded that the wage settlement should be geared towards improving the future prospects and development of industrial activity in Norway.

Negotiations in trend-setting industries

As usual, the wage settlement commenced with negotiations in the trend-setting industries, which involve a number of agreements between the Norwegian United Federation of Trade Unions (Fellesforbundet) on the employee side and the Federation of Norwegian Industries (Norsk Industri) on the employer side. The results of these negotiations, involving parts of the manufacturing sector, have a strong bearing on the results achieved in other agreement areas of the economy. In 2010, the parties agreed on a general pay increase of NOK 1 (about €0.13 as at 18 June 2010) an hour. The parties also agreed on an additional increase of NOK 0.50 (€0.06) an hour to be awarded to employees in industries with low average pay. Moreover, an additional NOK 0.50 an hour is to be set aside for a low pay and equal pay pot to be distributed at the individual company level.

The framework established by the trend-setting industry negotiations is expected to generate wage growth of 3% for 2010. Included in this estimate are the results of company-level negotiations, which will take place after the sector-level negotiations, as well as wage carry-over effects from the increases given in 2009 (NO0905019I). As such, the result may be described as moderate.

Gender pay gap and equality

The extraordinary funds set aside to correct any gender pay gaps will be distributed at the individual workplace level. The agreement reached assumes that the company-level social partners develop gender-based pay statistics, that they map the distribution of competence development initiatives in the enterprise, analyse the basis on which seniority pay increases are awarded, and assess the extent to which formal pay systems give due account to the fact that women more often than men take unpaid leave for care purposes. The funds not used to rectify any gender imbalances are to be distributed equally between all employees.

The parties also agreed a joint declaration on gender equality. The social partners invite the authorities to join them in a cooperative venture to achieve a more even distribution of parental leave between men and women. They are also calling on the government to make its contribution to a continuing and further education programme, aimed at enabling more women to qualify for management positions. Moreover, the social partners have called on the government to contribute to a strengthening of tripartite cooperation to achieve a more decent working life. The government has pledged its commitment to initiate a tripartite programme in the most vulnerable industries.

Strike in construction sector

Within the building and construction industry, wage negotiations culminated in strike action by some 16,000 workers. The dispute arose due to disagreement over minimum wage rates in the collective agreement. This will mainly be to the benefit of foreign workers (NO0612029I), as permanent employees in Norwegian companies are usually subject to pay levels that are significantly higher than the collectively agreed minimum rates. The strike ended after five days, and the new agreement means that the minimum wage rate for skilled workers will be increased from NOK 142.75 (€18.15) in 2009 to NOK 155.50 (€19.77) in 2010 and, finally, to NOK 159 (€20.21) in 2011. A similar increase will be awarded to unskilled workers.

Agreements in other private sector industries

Agreements have also been reached in a number of other private sector collective agreement areas in the course of April and May 2010. Such industries include the hotels and restaurants sector, wholesale and retail trade, parts of the transport sector, financial intermediation and the food industry. As in the trend-setting industries, general increases of between NOK 1 (€0.13) and NOK 1.50 (€0.19) were awarded, in addition to funds for low pay and equal pay increases. Since the 2010 spring wage settlement is carried out as an industry-level settlement, negotiations were set to continue in different parts of the private sector until the summer.

Kristine Nergaard, Fafo

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